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USDA Livestock & Poultry: World Markets & Trade


30 April 2013

USDA Livestock & Poultry: World Markets & Trade - April 2013USDA Livestock & Poultry: World Markets & Trade - April 2013


USDA Livestock & Poultry: World Markets & Trade

Global beef production for 2013 is virtually unchanged from the October estimate at 57.5 million tons as a sharp downward revision for India is offset by increases for a number of other countries. Although still forecast at a record, global exports are dropped 355,000 tons to 8.6 million driven by a more reticent outlook for India which exceeds upward revisions for Brazil and Australia. Import demand in East Asia, particularly in China and Hong Kong, is stronger while other key markets are weaker on lower consumption (Mexico) or increased production (South Korea).

World Exports 2013 Revised:
Broiler Meat Higher, Beef Lower and Pork Unchanged

Global pork production is revised upward 2.7 million tons to a record 107.4 million on expected lower feed prices. Exports are reduced 90,000 tons to 7.2 million on downward revisions to the EU, the United States, and Brazil.

Global broiler meat production is revised upward by 1.1 million tons to 84.6 million with the majority of growth provided by the United States, Thailand and Russia. World exports are revised up 262,000 tons to 10.3 million bolstered by higher exports from the United States, Turkey, and Ukraine.

Beef and Veal: 2013 Revised from October

Global beef production is virtually unchanged at 57.5 million tons as a sharp downward revision for India is offset by increases for a number of other countries. Although still forecast at a record, global exports are dropped 355,000 tons to 8.6 million driven by a more reticent outlook for India which exceeds upward revisions for Brazil and Australia. Import demand in East Asia, particularly in China and Hong Kong, is stronger while other key markets are weaker on lower consumption (Mexico) or increased production (South Korea).

Beef Export Competition Tightens Between Brazil and India

United States

Production is revised 113,000 tons higher to nearly 11.4 million on heavier slaughter weight expectations which more than offset a reduction in slaughter. However, the outlook is constrained by the availability of slaughter cattle due to declining calf crops, prior liquidation spurred by drought, and elevated feed prices. The forecasts for imports and exports are virtually unchanged. Improved market access in Japan and Hong Kong partnered with strong demand in other key markets are expected to offset restrictions by Russia.

Brazil

Production is revised 125,000 tons higher to a record 9.5 million. Despite a shift of some pasture to soybeans and corn during the current season, herd expansion is bolstered by government support, genetic improvements, better pasture management, sustained cattle prices, excellent pasture conditions, greater supplies of slaughter cattle and strong international demand.

Exports are revised 150,000 tons higher to nearly 1.6 million as stable competitive prices and ample supplies boost shipments. A 16 percent devaluation of the Real over the past year will help Brazilian competitiveness. Thus despite the atypical BSE case in the state of Parana, only made public in late 2012, restrictions by Saudi Arabia, Japan, South Africa, South Korea, China and Taiwan (combined less than 5 percent of exports) will be more than offset by demand from other markets. Increased opportunities for shipments to Russia will likely be generated due to gradual Brazilian plant relistings as well as Russian restrictions on competing U.S. beef.

EU

Production is revised 35,000 tons higher to 7.7 million. With a slight increase in consumption, the trade forecast remains unchanged.

China

Production is virtually unchanged at nearly 5.6 million tons. Despite restrictions on Brazil, imports are forecast 141,000 tons higher to a record 175,000 as demand remains firm and foreign products are becoming price-competitive due to a stronger Yuan.

Argentina

Production is revised 20,000 tons upward to 2.8 million on increased slaughter as higher than expected production costs squeeze profit margins. However, exports remain unchanged at 180,000 tons constrained by government export regulations, elevated cattle prices and competition from other South American suppliers (Uruguay and Paraguay) in key markets such as Chile, Russia and Israel.

Australia

Production is revised upward 25,000 tons to a record 2.2 million on increased slaughter due to a return to drier conditions, rising input costs and higher rural debt. With ample supplies, competitive prices and robust international demand, exports are revised 55,000 tons higher to a record of nearly 1.5 million. Higher than previously forecast demand by China and greater shipments to the United States are expected to more than offset declines in key markets (Japan and South Korea).

Mexico

Production is virtually unchanged at 1.8 million tons as the sector continues to be challenged by low volumes of slaughter ready cattle due to drought-impacted pasture, high feed prices and elevated live cattle exports. As higher beef prices depress consumption across all income levels, imports are revised 90,000 tons lower to 260,000. Exports remain unchanged.

Live cattle exports are revised 35,000 head lower to 1.3 million as smaller calf crops constrain supplies and Turkey closed its market to shipments from Mexico.

Russia

Production is revised 45,000 tons upward to nearly 1.4 million on higher than expected slaughter caused by higher feed prices as well as rising weights due to improved herd management. Imports are revised 45,000 tons lower to 1.0 million due to data revisions.

Canada

Production is revised 55,000 tons lower to 1.0 million, a 17-year low. Revisions to prior calf crops have negatively impacted cattle available for slaughter. Tighter supplies generate a downward revision of exports by 85,000 tons to 330,000, also a 17-year low even compared to 2003 (its first BSE case). Tight supplies and stable demand also push imports 25,000 tons higher to 315,000 tons.

Live cattle exports are forecast 175,000 head higher to 875,000 due to the erosion of the feed cost advantage vis-à-vis the United States as well as operational changes at one plant (XL Foods, Alberta) and the closure of another (Levinoff-Colbex, Quebec).

Japan

Production is revised 10,000 tons higher to 505,000 on stronger demand. Expanded market access for U.S. beef and anticipated strong demand for grain-fed beef is expected to boost imports and consumption. Imports are revised 10,000 tons higher to 760,000 with U.S. market share expected to increase at the expense of Australia.

Paraguay

Strong foreign demand, particularly by Russia, drives production 35,000 tons higher to 465,000 and exports 25,000 tons higher to 275,000.

South Korea

Production is revised 35,000 tons higher to 336,000 on increased slaughter due changed profit margins on revised forecasts for live cattle prices (lower) and feed prices (higher). Consumption is expected to decline slightly, constrained by an abundant supply of low-priced domestic pork and a sluggish economy. As a result, imports are revised 35,000 tons lower to 370,000 tons.

Saudi Arabia

With production unchanged, imports are revised 40,000 tons lower to 165,000 as BSE-related restrictions on Brazil constrain importable supplies.

Pork: 2013 Revised from October

Global pork production is revised upward 2.7 million tons to a record 107.4 million on expected lower feed prices. Exports are reduced 90,000 tons to 7.2 million on downward revisions to the EU, the United States, and Brazil.

Mexico and China Account for Growing Share of U.S. Pork Exports

United States

Production is raised 229,000 tons to 10.7 million largely on expected lower feed grain prices and more slaughter. Slaughter hog supply is greater because of smaller declines to the swine breeding herd and a larger pig crop, as producers weathered 2012 high feed grain prices. Adding to hog supplies, swine imports are raised 100,000 head to 5.6 million with expectations that a more normal corn crop will boost demand for Canadian feeder pigs.

Exports are lowered 84,000 tons to 2.4 million as lower sales to Russia and soft Japanese demand offset greater exports to Mexico and Canada.

Swine exports, which consist almost entirely of breeding stock, are raised 20,000 head to 60,000 due to growing demand from China, Mexico, and Russia. A recent protocol with the EU now allows U.S. hogs to transit through to Russia.

China

Production is raised by 1.8 million tons to a record 53.8 million mainly on greater slaughter hog supplies and heavier carcass weights. The pig crop is raised 3 percent due to better disease management practices which limited losses during the winter season. The government’s decision to extend sow production subsidies through June is expected to help boost pig production.

Imports are lowered 115,000 tons to 700,000 on higher domestic production and lower pork prices.

Swine exports are raised 90,000 head to 1.7 million as lower priced hogs meet stronger demand from Hong Kong and Macau.

EU

Pork production is lowered 75,000 tons to 22.6 million due to a lower pig crop resulting from the newly implemented sow housing requirements. Exports are lowered 115,000 tons to 2.3 million despite market opportunities because of tight exportable supplies.

Brazil

Production is raised 40,000 tons to 3.4 million on improved hog prices and more stable feed costs from record soybean and corn crops. However, exports are lowered 25,000 tons to 620,000 because of Ukraine’s restrictions on imports from Brazil, which was their top market last year. Sales will likely be re-directed to other markets like Russia, Angola, Georgia, and Moldova. Russia’s elimination of preferential tariff rates is not expected to limit sales.

Canada

Production is raised 20,000 tons to 1.8 million as the hog sector copes with high feed costs and the producers’ fragile financial situations. Most remained in business and continued to produce as usual on expectations of improved hog prices. Consequentially, sow beginning were higher and the pig crop is raised 350,000 head to 28.2 million. Swine exports are raised 100,000 head to 5.7 million as U.S. demand for feeder pigs is expected to remain strong.

Pork exports are boosted 35,000 tons to 1.2 million on greater shipments to Mexico and Russia. New Russian ractopamine restrictions may slow sales in the near term and keep them below 2012 levels.

Russia

Production is up 75,000 tons to 2.2 million despite higher feed prices. The hog industry continues to expand, aided by government support for large, modern facilities. However, imports are also raised 80,000 tons to 1.1 million, given their competitive prices. Trade restrictions on U.S. pork will mean more market share available for other suppliers.

Swine imports are cut by more than half to 250,000 head with ongoing restrictions on EU swine due to the Schmallenberg virus (a ruminant disease).

Japan

Production is raised 40,000 tons to 1.3 million on lower expected feed grain prices. The pig crop is revised upward 4 percent as the national sow inventory is rebuilt, particularly in the Miyazaki prefecture (a major hog producing region that was hard hit by an outbreak of Foot and Mouth Disease (FMD) several years ago).

Imports are lowered 30,000 tons to 1.2 million based on the depreciation of the yen, larger domestic supplies, greater consumption of U.S. beef due to improved market access, and increased competition from poultry meat because of competitive prices.

Mexico

Production is forecast 60,000 tons higher at 1.3 million, as more sows were retained last year. However, imports are also raised 80,000 tons to a record 770,000 based on competitive import prices and strong demand, as pork substitutes for higher-priced beef. Swine imports are doubled as industry expansion results in strong breeding stock demand.

South Korea

Production is raised 190,000 tons to a record 1.2 million. The swine industry recovery following the 2011 FMD outbreak resulted in an oversupply of hogs. In an attempt to stop prices from falling below production costs, the government procured 64,000 head in the first 2 months of 2013. Producer groups and the government have also agreed to: 1) a voluntary 20 percent reduction in sow stocks with failure to comply resulting in reduced government support, 2) reduced slaughter weights, 3) an increase in the ratio of domestic to imported pork in processed meat and 4) a national bacon sale for 2 weeks in March to encourage consumption. As a result of these large domestic supplies, consumption is up to record levels while imports are slashed 105,000 tons to 400,000.

Ukraine

Production is lowered 20,000 tons to 600,000. However, imports are unchanged at 200,000 tons. A ban on imports from Brazil (Ukraine’s largest supplier) is expected to keep trade below record 2012 levels.

Broiler Meat: 2013 Revised from October

Global broiler meat production is revised upward by 1.1 million tons to 84.6 million with the majority of growth provided by the United States, Thailand and Russia. World exports are revised up 262,000 tons to 10.3 million bolstered by higher exports from the United States, Turkey, and Ukraine.

Smaller Suppliers of Broiler Meat Capture Nearly Half of Demand Growth

United States

Production is boosted 671,000 tons to a record 17.0 million as a result of better prices and higher weights. Exports are raised 114,000 tons to 3.3 million driven by escalating demand in Mexico and Cuba, coupled with Russia’s removal of preferential tariffs for a number of counties including Brazil.

Brazil

Production is lowered 170,000 tons to 12.8 million as a result of shrinking domestic demand. However, exports are raised 25,000 tons to 3.6 million due to greater demand in East Asia and the Middle East.

EU

Production is down 30,000 tons to 9.6 million as declines in France and the United Kingdom outweigh expansion mainly in Germany and Poland. Exports are lowered by 60,000 tons to 1.1 million due to a reduction of available exportable supplies, as a result of the bankruptcy of Doux (France’s leading producer) and lower restitutions.

China

Production is decreased by 50,000 tons to 14.1 million due to tighter margins on higher feed costs and lower prices. Exports are unchanged at 400,000 tons due to price competitive supplies from Brazil and the United States in some markets, but expanding demand in other markets.

Russia

Production is raised 100,000 tons to 3.0 million as increased government supports and stronger demand (fueled by a rising preference for value-added products and elevated red meat prices) moderate higher costs. Exports are up 25,000 tons to 80,000 as a result of preferential market access to Kazakhstan due to the Customs Union. Imports are higher by 60,000 tons to 580,000 due to greater demand for low-cost sources of protein.

Mexico

Production is increased 25,000 tons to 3.0 million despite higher costs associated with feed and bio-security measures in response to the avian influenza (AI) outbreak. Exports are cut 4,000 tons to 8,000 due to the AI outbreak. Imports remain unchanged at 640,000 tons as a result of stable per capita consumption.

Argentina

Production remains unchanged at 2.0 million tons, while exports are up 30,000 tons to 315,000 in response to larger demand from Venezuela, China and Chile.

Turkey

Production remains unchanged at 1.7 million tons, although exports are raised 70,000 tons to 330,000 as a result of burgeoning demand from Iraq and other Middle-East markets.

Thailand

Production is boosted 110,000 tons to 1.6 million as a result of higher domestic and foreign demand. Exports are up 20,000 tons to 600,000 with greater market access to European and East Asian markets.

Ukraine

Production is raised 83,000 tons to 903,000 as new production facilities come into operation. Exports jump 70,000 tons to 120,000 in response to growing demand from Kazakhstan and Russia.

April 2013

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